Investor presentation February 2018 - BioGaia
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Investor presentation February 2018
BioGaia in short
• Founded in 1990
• 124 employees
• Offices in Sweden (Stockholm,
The founders Peter Rothschild and Jan Annwall
Lund, Eslöv), USA, Japan
• Products in 100 markets through
distributors
• Holds 440 patents in 32 families
• Listed on the Nasdaq Stockholm
(mid cap list)
2
BioGaia – a healthcare
company working with
probiotics
Mission: BioGaia conducts research and
development to provide consumers with
clinically proven, health-promoting, patented
and user-friendly probiotic products.
Vision: To be a groundbreaking leader in
probiotics through:
• Innovative research
• Unique formulations and packaging
• Excellence in IP
• Global presence
• Strong brand recognition
• Social responsibility
• Being an attractive workplace
3
BioGaia
Partners Product development,
Suppliers
BioGaia’s global network Pharma and
product strategies,
research, Quality,
Contract
Health Food Manufacturing
market support
companies
Research
Pre-clinical and
clinical studies
in hospitals and
universities
4
BioGaia’s partner network
Local distributors
with medical
representatives
who promote
to health
professionals
Dietary
supplement BioGaia BioGaia
brand
Sales
through
Pharmacies
5
BioGaia’s partner support
• Clinical trials
• Marketing and PR support
• BioGaia Academy
• Workshops
• Participation in medical congresses
• Speakers at symposiums
• Education of sales representatives
• www.biogaia.com
• Social media
• Customer support 24/7/365
6
BioGaia Brand
• Branding for Health professionals
• Sold in 60 countries
• 69% of sales of finished consumer products (drops, digestive health tablets,
oral health tablets, oral rehydration solution) were sold under the BioGaia
brand, including co-branding, in 2017.
• Build value, less dependence on patents
Protectis Protectis Gastrus Prodentis
7
BioGaia’s Intellectual Property Rights
• 440 issued patents in 32 families
• Trademarks in 66 countries + EU
• 70 Internet-domains
www.biogaia.com
8
Clinical trials
supporting the use of
BioGaia Probiotics
184 completed clinical trials in
15,500 individuals
159 scientific articles and 12 doctoral theses
Updated March 2017
9
Clinical trials with L. reuteri Protectis in different age groups
137 completed clinical trials (66% children) in 12,829 individuals (82% children)
46 studies in
2 301 subjects
26 studies in
2 559 subjects
17 studies in
2 039 subjects
32 studies in
3 109 subjects
16 studies in
2 821 subjects
Preterms Infants (0-12 mo, Children (13-36 mo) Children (4-18 y) Adults (>18 y)
excl. preterms)
CONFIDENTIAL
10
Updated: March 2017BioGaia Probiotics and Indications
Colic
Functional gastrointestinal
disorders
Regurgitation
Protectis
Acute gastroenteritis
Constipation
Protectis Functional abdominal
Support of gastrointestinal pain
health
Antibiotic-associated side-
effects
Eradication treatment
associated side-effects
Gastrus
HP-infection
Gingivitis
Prodentis
Periodontitis
11L. reuteri Protectis in infantile colic
Five treatment studies showing beneficial effects
– Significant reduction of daily crying time
– Significantly higher number of responders
– Improved family quality of life
Five meta-analyses with the same conclusion
– L. reuteri Protectis is the only probiotic proven effective in infantile colic
One treatment recommendation
Two prevention studies in healthy infants
– Significant reduction of daily crying time
– Fewer paediatric consultations
– Reduction in both public and private costs for managing functional
gastrointestinal disorders
12L. reuteri Protectis in functional
constipation in children and adults
Three treatment studies showing beneficial
effect
– Increased bowel movements
– 100% “normalization” of stool frequency
– Equally effective as lactulose, with less side
effects
One systematic review
– L. reuteri Protectis the only probiotic with data on
functional constipation in children
One prevention study in healthy infants
– Significantly increased bowel movements when
used preventively
13L. reuteri Protectis in functional
abdominal pain (FAP)
Three double blind, randomized controlled
treatment trials showing
•less stomach pain compared to placebo
•reduced severity of abdominal pain
•reduced frequency of abdominal pain
One published systematic review
L. reuteri Protectis the only probiotic with effect in FAP
One Cochrane report supporting probiotic
use in FAP
14L. reuteri Protectis in acute
gastroenteritis (AGE)
Six treatment studies
– Reduced duration and severity of acute diarrhoea
– Less vomiting
– Significant effects from the second day of treatment
– Effects seen in both hospitalised and outpatient children
Meta-analysis
– Significant reduction in the duration of diarrhoea
ESPGHAN recommendation 2014
– L. reuteri Protectis on the positive recommendation list for
managing AGE
15L. reuteri Gastrus in H. pylori therapy
Two H. pylori related clinical studies showing significant
effects:
– Reduced side effects and symptoms
– Reduced gastritis severity and activity
– Improved eradication rates
16Clinical studies with L. reuteri
Prodentis on Periodontitis
Author, Year Results
In patients with deep pockets supplementation of Lactobacillus reuteri Prodentis as an adjunct
Teughels 2013
to SRP leads to significant reduction in the need for surgery
In patients with deep pockets supplementation of Lactobacillus reuteri Prodentis as an adjunct
Tekçe 2015
to SRP leads to additional PD reduction of 1 mm at 1-year follow-up
Adjuvant probiotic therapy provides additional benefit over initial periodontal therapy on clinical
Ince 2015
and biochemical parameters over 180 days.
L. reuteri induces in most of the patients with chronic periodontitis a significant reduction in pro-
Szkaradkiewicz 2013
inflammatory cytokine response and improvement of clinical parameters
L. reuteri supplementation in patients with initial- to-moderate chronic periodontitis resulted in
Vicario 2012
significant improvements in clinical conditions compared with placebo.
L. reuteri Prodentis is suggested as an addition to mechanical debridement and during the
Vivekananda 2010
maintenance phase of periodontal treatment.
17Clinical studies with L. reuteri
Prodentis on gingivitis and otheroral
symptoms
Author, Year Results
Supplementation of L. reuteri Prodentis significantly reduced inflammation and plaque
Schlagenhauf 2016
compared to placebo in 45 pregnant women with gingivitis.
Kraft-Bodi 2015 Daily use of L. reuteri Prodentis reduces the prevalence of oral Candida in frail elderly patients.
Daily supplementation with L. reuteri from birth and during the first year of life is associated with
Stensson 2013
reduced caries prevalence and gingivitis score in the primary dentition at 9 years of age.
L. reuteri Prodentis delays regrowth of caries-associated Streptococcus mutans after full-mouth
Romani 2015
disinfection.
Daily use of L. reuteri Prodentis showed beneficial effect on oral malodour assessed by
Keller 2012
organoleptic scores.
The probiotic lozenge containing L. reuteri Prodentis significantly reduced salivary
Çaglar 2008
Streptococcus mutans streptococci.
18BioGaia Group
19BioGaia Group
The microbiome partner
Antibiotic resistance
Foundation BioGaia AB 36%
MetaboGen
Capable Pharma Production
20BioGaia Group
The microbiome partner
Antibiotic
resistance BioGaia AB 36%
Foundation
Metabogen
Capable Pharma Production
• Production of BioGaia drops, Easy Dropper, MiniPac and samples
• GMP pharma certified
• Product development
• Laboratory
GMP certified BioGaia Production BioGaia Production 21BioGaia Group
The microbiome partner
Antibiotic
resistance BioGaia AB 36%
Foundation
Metabogen
Capable Pharma Production
• BioGaia Pharma AB is a subsidiary to BioGaia AB applying 25 years of probiotic
experience to the research and development of new microbial therapeutic platforms.
• Through an established network of research institutions and companies, BioGaia
Pharma’s mission is to match early research on candidates from the microbiome with
unmet medical needs to develop drug platforms.
• Formed: June 2017
• Location: Stockholm, Sweden
• www.biogaiapharma.com
• Areas of focus: infectious diseases; inflammatory and gastrointestinal disordersBioGaia Group
The microbiome partner
Antibiotic
resistance BioGaia AB 36%
Foundation
Metabogen
Capable Pharma Production
• Providing innovative packaging solutions allowing the development of new
unique beverages
• Exclusive LifeTop™ Cap and LifeTop™ Straw supplier
• Learn more at www.lifetop.eu
LifeTop™ Cap LifeTop™ StrawBioGaia Group
The microbiome partner
Antibiotic
resistance BioGaia AB 36%
Foundation
Metabogen
(36% owned by BioGaia) Capable Pharma Production
Development of next generation probiotics
• MetaboGen works to develop products from novel bacterial strains, targeted for precise indications and
derived from the human gut microbiome
• Products may be food supplements, or drugs, depending on the indication and the preference of future
partners
• MetaboGen provides BioGaia with access to front-line development of next generation microbial products,
including regulatory development in this emerging field
DISCOVERY, FINDING FULL METAGENOME STRAIN PRODUCT CLINICAL TRIAL
FUNCTIONAL RELATIONSHIPS ANALYSIS IDENTIFICATION DEVELOPMENT REGULATORY WORK
MARKETING
Jens Nielsen
Systems Biology
R&D
Fredrik Bäckhed
Metabolic disease
R&D
Performed in MetaboGen, including
unique technology for producing products of anaerobic strains Together with partnersBioGaia Group
A BioGaia
The microbiome partner
Antibiotic
Foundation against
resistance BioGaia AB 36%
Foundation
Metabogen
Antibiotic Resistance
Capable Pharma Production
A BioGaia CSR initiative that supports research
and education within the area of antibiotic
resistance by:
Giving financial support to research and
education that helps to prevent infections
which reduces the use of antibiotics and the
risk of antibiotic resistance.
Activities
• Twitter account (@ResResistance)
• Monthly newsletter – Resist the resistance
• Meetings with companies, organizations,
politicians to influence decision makers
• Articles in regional newspapers and
appearances by BioGaia representatives in
media
25Nestlé cooperation
26Cooperation with Nestlé
• Agreement Infant formula 2008
• New licence agreement infant formula 2012 (EUR 50.8 million,
recognised in 2012 and 2014)
• Sales of drops in the US and Australia
• Royalty agreement for the sales of Growing Up Milk for children
above the age of one
• Collaboration agreement (Royalties of total 92 MSEK over 2014-
2018)
• Other on-going development projects
27Market and Competitors
28Our Market: Global probiotic supplement
market 2015 ($ 3.8 billion)
0,1
0,6
1,9
1,2
America EU Asia Pacific Rest of world
International Probiotics Association 2015, Euromonitor International 2015
29Our Market: Global probiotic
supplement sales (Sales 2015 projected to 2020)
6 5,4
5
4 3,8
3 2,6
2
1
0
2010 2015 2020
Sales ($ in billion)
From 2015 to 2020, CAGR of 7,4% assumed according report from Global Market Insight
International Probiotics Association 2013 & 2015, Global Market Insights 2016
30What defines a probiotic supplement leader?
High quality & Innovative Consumer Distribution
Strong IP competitively dosage and HCP channels
priced culture formats loyalty
Fermen- Manu- B2B Brand B2C
R&D
tation facturing marketing owner marketing
31The BioGaia Benchmark
Fermen- Manu- Brand
R&D B2B marketing B2C marketing
tation facturing owner
• BioGaia IP, R&D and Product Development have enabled development of
the BioGaia pediatric brand with unrivaled global distribution channels
• BioGaia does not have in-house fermentation manufacturing capabilities
• BioGaia has focused less on B2C marketingBioGaia Competitors
• Companies developing, producing, and selling probiotics (Chr. Hansen)
• Well studied probiotic strains (L.GG from Valio)
• Non probiotic products / drugs (Imodium, Simethicone)
• Probiotic products with strong brands (Enterogermina)
• Pharma companies (Sanofi)
• Functional Food (ProViva)
33Importance of strain specificity
Probiotic bacteria Car
Group Lactic acid bacteria German car
Genus Lactobacillus Volkswagen
Species Lactobacillus reuteri VW Golf
Strain L. reuteri Protectis VW Golf 2.0 Turbo
Different breeds have different characteristics
and are suitable for different tasks
VW Golf I and the VW Golf VI GTI, similar cars, but you do not expect the same output
Try convincing your teenage daughter that an
iPhone 3 is just as good as an iPhone 6
34Major shareholder and
Board of Directors
35Major Shareholders 31 December, 2017
(source: Euroclear)
Share No. of
A shares B shares capital votes Capital Votes
000's 000's SEK 000's 000's % %
1 Annwall & Rothschild Inv. AB 741 509 1 250 7 916 7,2% 33,0%
2 Swedbank Robur fonder 1 626 1 626 1 626 9,4% 6,8%
3 Öhman Bank S.A 1 354 1 354 1 354 7,8% 5,6%
4 Fjärde AP-fonden 1 243 1 243 1 243 7,2% 5,2%
5 Clearstream Banking S.A 538 538 538 3,1% 2,2%
6 Banque Pictet &CiE 478 478 478 2,8% 2,0%
7 CBNY Norges Bank 456 456 456 2,6% 1,9%
8 Ålandsbanken ABP, Bank of Åland LTD 421 421 421 2,4% 1,8%
9 SSB and Trust company, Boston 346 346 346 2,0% 1,4%
10 Tredje AP-fonden 316 316 316 1,8% 1,3%
Other shareholders 9 309 9 309 9 309 53,7% 38,8%
Total: 741 16 596 17 336 24 002 100% 100%
Total number of shareholders 31 December 2017: 8,566
Foreign owners: 46% of capital (33% of votes)
36Board of Directors
Chairman
Stefan Elving David Dangoor Inger
Holmström
Jan Annwall
Anthon
Jahreskog
Margaretha
Gadnell Ewa Björling Brit Stakston
37Sales and Profit
5 years Development
38Sales – 5 years development
Sales
700
+15%
600
+11%
500
+25%
22%
400
9%
Sales
300
Average growth: 16%
200
100
0
2013 2014*) 2015 2016 2017
39Sales and result per year (IBT excluded)
(MSEK)
700
600
Total sales
500
Gross profit
400
Operating expenses (cost
300 of goods excluded)
Operating result
200
Profit before tax
100
0
2013 2014*) 2015 2016 2017
*) Excluding license revenue Nestlé Infant Formula
402017 and q4
41Sales per segment (MSEK)
Q4 Q4 Change Change Jan-Dec Jan-Dec Change Change
2017 2016 % % 1) 2017 2016 % % 1)
Pediatrics 139 119 16% 20% 493 433 14% 13%
Adult health 31 16 95% 104% 116 85 36% 39%
Other 1 4 -85% -85% 6 16 -62% -62%
Total sales 170 139 23% 27% 615 535 15% 15%
1) Excluding currency effects
42Sales per geographical market (MSEK)
Q4 Q4 Change Jan-Dec Jan-Dec Change
2017 2016 % 2017 2016 %
EMEA 115
22% 93 24% 393 376 5%
Asia Pacific 35 13 161% 95 56 72%
Americas 20 32 -38% 126 103 23%
170 139 23% 615 535 15%
43 43Current Regional sales split
Europe,
Middle East & Africa
Americas 64% Asia Pacific
20% 16%
44Gross margin per segment
Q4 Q4 Jan-Dec Jan-Dec
2017 2016 2017 2016
Pediatrics 78% 77% 77% 74%
Adult health 71% 54% 67% 62%
Other 93% 99% 99% 98%
Total sales 77% 75% 75% 73%
45Profit & Loss (MSEK)
Jan-Dec Jan-Dec
q4 2017 q4 2016 Growth 2017 2016 Growth
Sales 170 139 23% 615 535 15%
Gross profit 131 104 26% 463 388 19%
Operating expenses -69 -57 21% -225 -193 17%
Other income/expenses 3 -1 -5 4
Operating profit (EBIT) 65 46 40% 234 199 17%
EBIT MARGIN 38% 33% 38% 37%
Profit after tax 48 47 3% 180 159 13%
EPS 2,79 2,71 3% 10,42 9,19 13%
46Balance sheet (MSEK)
Dec 31 Dec 31
Assets 2017 2016
Property, plant & Equipment 103 82
Shares in Associated company 10 11
Deferred tax asset 9 10
Current assets 148 142
Cash and cash equivalents 306 243
Total assets 576 489
Equity and liabilities
Equity attributable to owners of the Parent
company 464 415
Non-controlling interests - -
Total equity 464 415
Deferred tax liability 1 -
Interest-free current liabilities 111 73
Total equity and liabilities 576 489
Proposed dividend: 9.00 SEK per share (total 156 MSEK) and 2.7 MSEK to Foundation
47Cash flow (MSEK)
Q4 Q4 Jan-Dec Jan-Dec
2017 2016 2017 2016
Cash flow from operating activities
53 41 191 155
before changes in working capital
Changes in working capital 16 6 32 -7
Cash flow from operating activities 69 48 223 148
Cash flow from investing activities -2 -6 -27 -10
Cash flow from financing activities -2 - -132 -124
Cash flow for the period 66 42 64 14
Cash at beginning of period 240 202 243 227
Cash at end of period 306 243 306 243
48Key events 2017
• Start of BioGaia Pharma, a new subsidiary for the development of probiotic
drugs
• Agreement for the sales of BioGaia´s products in Thailand
• Agreement for the sales of BioGaia Protectis drops in Australia
• Agreements for sales of BioGaia ProDentis lozenges in Canada, South
Korea, Vietnam and the Philippines
• Launches of BioGaia BioGaia Protectis drops in Australia, Kenia,
Philippines and Kosovo
• Launches of BioGaia Protectis tablets in Colombia, Finland (new flavour),
Germany, Honduras, Mexico and Thailand
• Launches of BioGaia Prodentis lozenges in Philippines and Vietnam
• Launch of Yoghurt with BioGaia Prodentis bacteria culture in Japan
• Launch of BioGaia Protectis tablets with 20 microgram of Vitamin D in Italy
and Canada
• Launch of BioGaia Gastrus tablets in Hong Kong
• Launch of LifeTop Straw in Singapore
49Key events 2017 (cont’d)
• Clinical study published: BioGaia Protectis shown to promote growth
and prevent recurrent diarrhea.
• Clinical Study: Lactobacillus reuteri reduced bone loss in older women.
Key events after the end of 2017
• Two new meta-analyses confirm the effectiveness of BioGaia’s probiotic in
infant colic.
• BioGaia Protectis with vitamin D to be launched on the Swedish market.
• Agreement with Abbott for the rights to sell BioGaia Protectis tablets in China.
50Present Focus – BioGaia Strategic Drivers
Growth Customer focus Operational Efficiency Innovation Sustainability
My personal We are business-minded We are honest,
engagement is a prerequisite We are innovative and and deliver on our respectful, and selfless in
for BioGaia’s success action-oriented promises what we do and say
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